ON CAPITOL HILL

Bill would dump IRS for sales tax

Rep. John Linder reintroduces legislation to overhaul federal system

Ron Strom is commentary editor of WND, a post he took in 2006 after serving as a news editor since 2000. Prior to coming on board with WND, Strom worked in politics in California. Married and the father of two homeschool graduates, he has served in leadership positions in his church, local nonprofit boards and in county government.

A federal bill that would do away with federal income tax and replace it with a national sales tax has been introduced again in the House of Representative after the same bill failed to get committee consideration in the last Congress.

The bill, H.R. 25, is sponsored by Rep. John Linder, R-Ga. Dubbed the “FairTax” proposal, the bill “will repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, estate taxes and gift taxes – and replace it with a revenue-neutral personal consumption tax,” according to the congressman’s website.

Because the 23 percent consumption tax is paid only by the end user, business-to-business purchases for the production of goods and services would not be taxed. An organization pushing Linder’s plan, Americans for Fair Taxation, estimates consumer prices would drop by an estimated 20-30 percent as a result of the change.

Also included in the bill is a rebate payment that would go to every American household to replace the sales tax paid on necessities. Those in poverty, the bill’s proponents say, would effectively not pay any tax under the new system.

“Under the FairTax, no American will pay taxes on necessities,” says Americans for Fair Taxation. “The rebate will be equivalent to the tax paid on essential goods and services. The rebate will be mailed before the tax is actually paid [and] will be paid in equal installments at the beginning of the month. The size of the monthly rebate will be determined by the federal poverty level for a particular household size.”

Says Linder: “The FairTax offers long-needed tax relief – in the form of lower prices, nearly nonexistent compliance costs and the ability to choose how much to spend in taxes – to all Americans, while eliminating the income tax and allowing Americans to keep 100 percent of their paycheck.”

Though supporters had hoped to have 100 co-sponsors’ names on the bill by July of last year, the 108th Congress ended with the legislation having garnered just 54 co-sponsors.

At 54 co-sponsors, however, the bill had the most of any “fundamental tax-reform bill in the last Congress,” noted Gretchen Learman, Linder’s spokesperson.

“We’re rebuilding up to that number now,” she said, noting the bill, which was reintroduced on Jan. 4 currently has 30 co-sponsors.

Learman hopes increased interest in the idea of scrapping the much-maligned IRS will help to collect co-sponsors and get a hearing of the bill on the committee level.

On his website, Linder says the idea of “putting the nation on a simple, fair and voluntary tax system is building excitement among folks across the country every day.”